2012 has been heralded as the year of recovery and Australia has been no different. There has been an air of significant improvement and stabilisation across the country and the overall perception is that business conditions remain solid, driven by a rise in sales and profits throughout the year.
But what about 2013? My perception is that it will be a year of further stabilisation, with uncertainty in some industry sectors.
The year that was -
- Overall conditions definitely improved and driven by a rise in net sales and profits during year.
- Almost the same number of companies went into external administration from Jan – Sep this year compared to the same period last year. Which tells us that conditions remain tough for many businesses.
- Conditions in the last six months in particular have been uncertain. Limited access to credit is having a profound effect on growth and most are continuing to operate very leanly.
- Particular industries like construction and retail are doing it very tough at the moment mainly because of interest rate concerns and a slowdown in consumer spending as well as the fact consumers are spending more online for cheaper prices.
- Other sectors such as Technology and Innovation have seen significant success and their ability to raise capital in an uncertain market has increased.
- We have seen an increase in Angel investors resurfacing and taking interest in the market.
Challenges to be faced in 2013 -
- Uncertainty is likely to continue.
- Interest rates will continue to play a major role in market conditions in terms of spending
- Also bank lending will likely to remain tight for small businesses.
- It’s predicted that more businesses will be up for sale as the baby boomer generation retires, which account for owning more than half of Australia’s small business. So succession planning is likely to be more of an issue for many businesses.
- New technology is going to have a huge impact on the way we do business. Not only will we see new ways of doing business, with things like cloud computing, but we’ll also see new kinds of business and new opportunities arise.
- Re-balancing of the Australian economy in 2013 is what is necessary and what is expected. After a period when growth has been very uneven, led by the resources sector, it is expected other parts of the economy will revive, such as housing and tourism. This will be driven by below average interest rates and the effect of the steady Australian dollar. Growth in Australia should be more broad-based across industries than previously.
Sectors to thrive in 2013
- Technology: This is an ever changing landscape, contemplate the huge advances in technology that have been witnessed over the past 5 years. Your business will be able to extract ever increasing productivity and competitive gains through the application of technology. Upcoming trends include: Mobile devices, the personal cloud replaces the notion of personal computer, cloud computing.
- Foreign investment: Parties in sensitive sectors will need to apply time and effort into considering foreign investment issues and addressing them through conditions or other means.
- Electricity generation: The electricity generation industry is forecast to grow strongly over the coming year, largely driven by the flow-on effects of the carbon tax – as the industry is the largest contributor of carbon dioxide in Australia at 32% of total emissions.
- Preschool education: Growth is expected to be driven primarily by additional funding from the Australian Government to support reforms aimed at standardising preschool education.
- Superannuation funds: A return in confidence and favourable investment conditions is expected in 2013.
- Organic farming: Demand for organic produce has been mainly driven by growing consumer interest in sustainable food production and rising disposable incomes.
Remaining competitive in 2013 -
- Remain focused on your business and also on your industry.
- Be innovative and find better ways of caring out your core business. Eg. Move part of your sales process online, find a new market for your product.
- Address your level of debt.
- Adopt new technologies into your business.
- Keep control of your financial position.
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